nigel woollsey

Nigel Woollsey

Online Writer
Published: 28/05/2019

As of today, certain banks and building societies have signed to up a new voluntary agreement to refund the victims of fraud – especially those scams known as authorised push payment cons.

Last year some 84,000 people lost a total of £354m to criminals – many of these cases involved individuals losing tens of thousands of pounds to the con artists. In the same period, just £83m was refunded to customers – heaping more misery on top of the loss of what is often a victim’s life savings.

However, the new voluntary agreement will look to banks to judge each case by a new set of criteria, by which customers who have taken reasonable care or who can demonstrate an element of vulnerability will be refunded in full if they become the target of authorised push payment scams.

Which banks have signed up?

Eight of the big banks, covering some 17 brands, have signed up to this new fraud protection scheme:

  • Barclays
  • HSBC (including First Direct and M&S Bank) 
  • Lloyds (including Halifax, Bank of Scotland and Intelligent Finance)
  • Metro Bank
  • Nationwide
  • RBS (including NatWest and Ulster Bank) 
  • Santander (including Cahoot and Carter Allen)
  • Starling Bank.


Significantly, TSB, while not a signatory, has already introduced a new fraud guarantee that promises to reimburse all customers who are the victims of banking fraud. Notable absences from the new voluntary agreement are the Co-operative Bank and Virgin Money. However, there has been concern voiced by some banking providers that a blanket fraud refund policy might serve to encourage criminals to simply try their luck more often.

How do authorised push payment scams work?

With online banking becoming more and more secure, criminals have had to revert to some old-fashioned cons to trick customers into revealing their banking details or sending their money to a fraudster’s bank account. Most often, criminals masquerade as legitimate businesses and organisations, examples of this include pretending to be solicitors, builders, tradesmen, the HMRC or the victim’s own bank.

Increasingly sophisticated criminals are taking to social media to gain inside knowledge that will help them to convince victims of their authenticity. In addition, criminals are taking advantage of large scale data breaches to identify potential targets.

In previous cases, banks have refused to reimburse anyone who had authorised the fraudulent payment – which is often the case where an innocent customer believes they are paying a genuine bill or account. Now, the new criterion is that banks will refund anyone who has taken ‘reasonable care’ or are vulnerable in some way. Only those who the bank considers having been ‘grossly negligent’ will be refused compensation. In addition, old cases cannot be reconsidered under the new voluntary agreement.

Cases should also be handled much more quickly, with most decisions being rendered in just three weeks to seven weeks, depending on the complexity of the fraud, with all payments made from a central pot that all the signatories will contribute to. Disputed cases will still be entitled to go before the Financial Ombudsman Service (FOS).

How can you protect yourself from online fraud?

Cyber-criminals are constantly on the prowl, looking for easy targets and deploying several methods to gain access to your private banking details. Moneyfacts.co.uk has put together several helpful guides that can help you protect yourself from banking scams and other online frauds.
Check out our guides for eight things your bank will never ask you to do and seven security rules to keep online banking safe. For the latest news about fraud prevention and scams to beware of, simply visit our dedicated news pages for the top headlines in the world of consumer money and finance.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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